Crypto Market Pullback Deepens as Profit-Taking and Global Tensions Weigh on Sentiment
Cryptocurrency markets reversed their weekend gains on Monday as renewed Middle East tensions triggered a broader risk-off move. The decline came alongside a 9.2% plunge in South Korea’s Kospi index and the liquidation of roughly $253 million in leveraged crypto positions.
Bitcoin fell during Asian and European trading hours, dropping toward $63,100 after ending the weekly session above $64,300 at midnight UTC.
The move marked a decline of around 1% for bitcoin, while alternative cryptocurrencies faced heavier selling pressure. Lighter (LIT) recorded the largest losses, sliding 8% in its first major correction following a rally of more than 200% over the previous two months.
The weakness was reflected across global markets, with investors reducing exposure to risk assets. South Korea’s Kospi fell sharply as SK Hynix, the memory chip manufacturer that recently began trading in the U.S., plunged 15%. Japan’s Nikkei and China’s SSE Composite also dropped more than 2%.
The sell-off followed renewed geopolitical concerns as tensions between the U.S. and Iran escalated, with both sides carrying out airstrikes amid disputes involving the Strait of Hormuz.
U.S. stock futures also pointed to a weaker opening, with Nasdaq 100 futures down 0.9% and S&P 500 futures lower by 0.25% since the start of the trading session.
Despite Monday’s decline, bitcoin and the wider crypto market had shown strong momentum heading into the weekend. The latest drop may partly represent traders securing profits after the recent advance.
Derivatives Data Shows Limited Market Stress
Bitcoin derivatives markets remained relatively stable despite the price decline. Open interest held near $17 billion, while the three-month annualized basis remained around 3.8%.
Funding rates were largely unchanged and slightly positive across most trading platforms, though Bybit stood out with BTC perpetual funding rates near -13% on an annualized basis.
The combination of stable open interest, firm futures premiums, and constructive funding rates suggests traders are maintaining their current positions without adding significant new leverage.
Options activity continued to favor bullish positioning. The 24-hour put/call ratio showed a 64% preference for calls compared with 36% for puts. Meanwhile, the one-week delta skew remained elevated at 16%, though it has eased from 26% a week earlier, indicating that call demand has moderated.
The at-the-money volatility curve remained upward-sloping, with short-term volatility expectations around 34%-35% and longer-term levels near 43% through mid-2027, signaling that traders anticipate relatively stable conditions over time.
According to CoinGlass, total crypto liquidations reached $253 million over the past 24 hours. Long positions accounted for 76% of liquidations, while shorts represented 24%. Bitcoin led with approximately $70 million in liquidations, followed by Ethereum at $60 million.
Binance liquidation data highlights the $62,000 price zone as an important level to watch if bitcoin experiences further downside.
Selected Altcoins Hold Up as Market Weakness Spreads
AI-focused cryptocurrencies FET and NEAR showed relative strength, each gaining about 1.5% despite the broader market decline.
Hyperliquid (HYPE) moved lower alongside Lighter, falling roughly 3.3% to $65.10, its weakest level since July 2.
CoinMarketCap’s Altcoin Season Index climbed to 56/100 from last week’s average of 50, suggesting investor appetite for risk has improved following several months of market pressure.
Cardano (ADA) remained one of the market’s most volatile large-cap tokens. After declining 39% in June, ADA rebounded more than 40% at the start of July before reversing course and dropping 19% since July 4.
Jupiter (JUP), the Solana-based decentralized exchange token, also struggled, falling more than 15% over the past week as daily trading volume declined to around $17 million. This represents a sharp slowdown from 2025 levels, when daily volumes often exceeded $500 million.
